CEO David Mowry and activist investor J. Daniel Plants, who has served on the board for eight years, were terminated for alleged violations of their employment contracts, Cutera said.
RTW Investments, Cutera's second biggest investor with a 9.3% stake, called on the company to reinstate Mowry and to hold a special meeting.
Market reaction to Mowry's removal "demonstrates the need for the Special Meeting and the lack of confidence in the board," RTW said in a statement.
Top Cutera executives, including the chief financial officer, on Tuesday supported Mowry and Plants, arguing the men work well together and had earned their trust.
The California-based company, which sells devices including laser treatments for tattoo removal and acne, appointed independent board member Sheila Hopkins as interim CEO.